Correlation Between SB Financial and Penns Woods
Can any of the company-specific risk be diversified away by investing in both SB Financial and Penns Woods at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SB Financial and Penns Woods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SB Financial Group and Penns Woods Bancorp, you can compare the effects of market volatilities on SB Financial and Penns Woods and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SB Financial with a short position of Penns Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SB Financial and Penns Woods.
Diversification Opportunities for SB Financial and Penns Woods
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBFG and Penns is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SB Financial Group and Penns Woods Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penns Woods Bancorp and SB Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SB Financial Group are associated (or correlated) with Penns Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penns Woods Bancorp has no effect on the direction of SB Financial i.e., SB Financial and Penns Woods go up and down completely randomly.
Pair Corralation between SB Financial and Penns Woods
Given the investment horizon of 90 days SB Financial is expected to generate 1.23 times less return on investment than Penns Woods. In addition to that, SB Financial is 1.41 times more volatile than Penns Woods Bancorp. It trades about 0.18 of its total potential returns per unit of risk. Penns Woods Bancorp is currently generating about 0.31 per unit of volatility. If you would invest 2,766 in Penns Woods Bancorp on August 30, 2024 and sell it today you would earn a total of 411.00 from holding Penns Woods Bancorp or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SB Financial Group vs. Penns Woods Bancorp
Performance |
| Timeline |
| SB Financial Group |
| Penns Woods Bancorp |
SB Financial and Penns Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SB Financial and Penns Woods
The main advantage of trading using opposite SB Financial and Penns Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SB Financial position performs unexpectedly, Penns Woods can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Penns Woods will offset losses from the drop in Penns Woods' long position.| SB Financial vs. Home Federal Bancorp | SB Financial vs. Lake Shore Bancorp | SB Financial vs. National Bankshares | SB Financial vs. Sound Financial Bancorp |
| Penns Woods vs. 1st Source | Penns Woods vs. Great Southern Bancorp | Penns Woods vs. Waterstone Financial | Penns Woods vs. First Community |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |